MODULE: 1 INTRODUCTION

“OB involves with the understanding, prediction and control of human behavior
and the factors which influence the performance of people as members of an
organization” - Luthans
Organization: Two or more persons coordinated together to achieve common
goal or set of goals.
Behavior: Set of actions or people’s action. Here the people are coordinated and
work to achieve a common goals.

Organizational behavior (often abbreviated OB) is a field of study that investigates

the impact that individuals, groups, and structure have on behavior within
organizations, for the purpose of applying such knowledge toward improving an
organization’s effectiveness.
OB is the study of what people do in an organization and how their behavior
affects the organization’s performance. OB includes the core topics of motivation,
leader behavior and power, interpersonal communication, group structure and
processes, learning, attitude development and perception, change processes,
conflict, work design, and work stress.

Why Individual Differences Are Important?

It is important for managers to know the individual differences among the
employees as:
 Individual differences have a direct effect on behavior
 People who perceive things differently behave differently
 People with different attitudes respond differently to directives
 People with different personalities interact differently with bosses,
coworkers, subordinates, and customers
Also, Individual differences help to explain:
 Why some people embrace change and others are fearful of it
 Why some employees will be productive only if they are closely supervised,
while others will be
 productive if they are not
 Why some workers learn new tasks more effectively than others workers .

Individual Differences influencing in the Workplace

Individual differences in hereditary and diversity factors, personality, ability

and skills, perception and attitude will affect work behavior like productivity,
creativity and performance.
1. Demographic characteristics are the background characteristics that help
shape what a person becomes. Important demographic characteristics for
the workplace are gender, age, race, ethnicity and able-bodiedness.
Gender
There is no consistent differences between men and women in problem-
solving abilities, analytical skills, competitive drive, motivation, learning ability
and sociability. As compared to men, women are more conforming, have lower
expectations of success, have higher absenteeism and lower earnings.
Age
Older workers are often stereotyped as inflexible. They sometimes complain
that their experience and skills are not valued. They generally have lower
turnover and lower avoidable absences
Able-bodiedness
Despite evidence of effective job performance, most disabled persons are
unemployed. Most disabled persons want to work and more firms are likely to
hire disabled workers in the future.
Racial and ethnic groups
African Americans, Asian Americans, and Hispanic Americans make up an ever-
increasing percentage of the American workforce. Potential for stereotypes
and discrimination can adversely affect career opportunities. Important
lessons regarding demographic characteristics are: knowing to respect and
deal with the needs and concerns of people with different demographics;
avoiding linking demographics to stereotypes and realizing that demography is
not a good indicator of individual-job fits.
Diversity Factors
Primary Dimensions (stable) are age, ethnicity, gender, physical attributes,
race and sexual / affectional orientation. Secondary Dimensions (changeable)
are educational background, marital status, religious beliefs, health and work
experience.
2. Aptitude and Ability
Aptitude is a person’s capability of learning something. Ability is a person’s
existing capacity to perform the various mental or physical tasks needed for a
given job. It includes relevant knowledge and skills. Intellectual Ability is the
capacity to do mental activities. Intelligence contains four subparts: cognitive,
social, emotional, and cultural.
3. Personality
It combines a set of physical and mental characteristics that reflect how a
person looks, thinks, acts, and feels. It is a relatively stable set of feelings and
behaviors that have been significantly formed by genetic and environmental
factors. Heredity sets the limits on the development of personality
characteristics. Environment determines development within these limits.
Across all characteristics there is about a 50-50 heredity-environment split.
Key environmental factors in personality development are cultural values and
norms and situational factors.
4. Values.
Values are broad preferences concerning appropriate courses of action or
outcomes. Values influence behavior and attitudes. Sources of values are
Parents, Friends, Teachers, Role models, External reference groups.
5. Perception
The cognitive process that involves receiving stimuli, organizing the stimuli,
and translating or interpreting the organized stimuli to influence behavior and
form attitudes. Each person selects various cues that influence perceptions
and people often misperceive.
6. Attitude
Attitude is a mental state of readiness learned and organized through
experience. It is exerting a specific response to people, objects, and situations
with which it is related. Attitudes are influenced by values and are acquired
from the same sources as values. It is a predisposition to respond in a positive
or negative way to someone or something in one’s environment. Attitudes are
determinates of behavior because they are linked with perception, personality,
feelings, and motivation.

DIFFERENT ORGNISATIONAL STRUCTURE

According to Stephen P Robbins “An Organisation structure defines how job

tasks are formally divided, grouped and coordinated”. According to
Fred Luthans “Organization structure represents the skeleton framework
for organizational behavior.”

The key elements of organizational structure are as follows:-

1. Work specialization: It is also known as division of labor. An organization is
composed of man power of different specialization or skills. So there should be
proper division of work among different workers.
2. Departmentalization: Departmentalization is the process of breaking down
an enterprise into various departments.
3. Chain of command: It is the line of authority extending from upper
organizational levels to lower levels, which clarifies who reports to whom.
4. Span of control: Span of Control states that how many employees can a
manager efficiently & effectively manage or the number of persons who are
directly responsible to the executive is called the span of control.
5. Centralization: Formal authority is concentrated at the top of the
organizational hierarchy. It is the degree to which decision making takes place
at upper levels of the organization.
6. Decentralization is the degree to which decision making takes place at
lower-level
7. Formalization: The degree to which rules, policies, procedures, instructions,
and communications are set forth in written records, documents, and
procedure manuals.
 Line Structure: In a line organization, authority originates at the top and
moves downward in a line. In this type of organization, authority flows
from top to bottom and responsibility flows from bottom to top. Each
departmental head has complete control over his section and he is fully
authorized to select his labor, staff, purchases of raw materials, stores
and to set the standards of output etc. The responsibility of each
departmental head is clearly defined. Each department works as a self
supporting unit. All managers perform functions that contribute directly
to company profits. Examples of line functions include production
managers, sales representatives, and marketing managers. Line
managers collect and analyze all of the information they need to carry
out their responsibilities.
Production managers, for example, hire and fire all of the assembly-line
workers in their departments. They also order all of the supplies their
department needs. Line organizations are common among small
businesses. Larger companies usually require a different kind of
organizational structure.

 Line and Staff Organization: The line and staff organization combines
the line organization with staff departments that support and advise line
department. In each department, there is one expert and some line
personnels / line officials. Line official will do all managerial work and
expert will give advice to line official or line personnel. Line and staff
organization is that in which the line heads are assisted by specialist
 staff. The line maintains discipline and stability, staff provides experts
information and helps to improve overall efficiency. Thus the staff are
thinkers while the line are doers.
 Functional Structure : Functional structure is set up so that each portion
of the organization is grouped according to its purpose. In this type of
organization, for example, there may be a marketing department, a
sales department and a production department. The functional
structure works very well for small businesses in which each department
can rely on the talent and knowledge of its workers and support itself.
However, one of the drawbacks to a functional structure is that the
coordination and communication between departments can be
restricted by the organizational boundaries of having the various
departments working separately.

 Divisional structure typically is used in larger companies that operate in

a wide geographic area or that have separate smaller organizations
within the umbrella group to cover different types of products or market
areas. For example, the now defunct Tecumseh Products Company was
organized divisionally--with a small engine division, a compressor
division, a parts division and divisions for each geographic area to
handle specific needs. The benefit of this structure is that needs can be
met more rapidly and more specifically; however, communication is
inhibited because employees in different divisions are not working
together. Divisional structure is costly because of its size and scope.
Small businesses can use a divisional structure on a smaller scale, having
different offices in different parts of the city, for example, or assigning
different sales teams to handle different geographic areas.
 BRIEF HISTORY OF OB

I. SCIENTIFIC MANAGEMENT

Charles Babbage was one early contributor to the scientific management

movement. He argued that organisations could realise greater profit if employees
specialised in performing a specific set of job activities. Managers, he argued
should train workers to perform each of these small tasks as efficiently as possible
and offer incentives for executing them quickly and effectively. Babbage believed
that managers should conduct time studies to determine how long it should take
to perform each task.

Frederick Winslow Taylor (1856-1915)is considered to be the father of scientific

management. Henry Gantt, Frank and Lillian Gilberth and Harrington Emerson
supported Taylor in his efforts. All these disciples of Taylor became famous in
their own right. Together with Taylor they revolutionized management thinking.
Scientific management is the name given to the principles and practices that grew
out of the work of Frederick Taylor and his followers and that are characterized by
concern for efficiency and systematization in management. Four basic parts of a
series of ideas developed by Taylor are as follows:
 Each person’s job should be broken down into elements and a scientific
way to perform each clement should be determined.
 Workers should be scientifically selected and trained to do the work in the
designed and trained manner.
 There should be good cooperation between management and workers so
that tasks are performed in the designed manner.
 There should be a division of labor between managers and workers.
Managers should take over the work of supervising and setting up
instructions and designing the work and the workers should be free to
perform the work himself.

The Gilbreths: the Gilbreths developed a scheme to classify the motions used in
the performance of a job. A motion was referred to as a therblig, their name spelt
backwards. Their classifications included such motions as grasping, holding and
moving. The motion scheme documented the relationship between types and
frequencies of motion and worker fatigue demonstrating that unnecessary
motions wasted energy. By separating appropriate from inappropriate motions
Gilbreths helped make more of a worker’s energy available for job performance.

Henry Gantt: Henry Gantt, an associate of Taylor’s added two techniques to

scientific management:
Henry Gantt chart-To summarize work activities and identify those that should be
performed simultaneously or sequentially.
Minimum wage based incentive system: Gantt promoted the idea that
employees should receive a minimum daily wage whether or not they achieved
their specified daily work objectives. He also recommended that employees
receive monetary incentive in the form of bonuses for work above and beyond
the expected standard.
II. THE BEHAVIORAL SCHOOL OF MANAGEMENT THOUGHT AND
PRACTICE
EARLY CONTRIBUTIONS:
THE HUMAN RELATIONS APPROACH
The main emphasis of the classical writers was on structure and the formal
organization, but during the 1920s, the years of the Great Depression, greater
attention began to be paid to the social factors at work and to the behaviour of
employees within an organisation – that is, to human relations.

The Hawthorne experiments

The experiments were carried out between 1927 and 1933 at the Chicago
Hawthorne plant of the Western Electric Company. Four studies were carried out
namely:
 The illumination studies
 The Relay Assembly Test Room Studies
 The interviewing Program
 The Bank Wiring Room studies
Among the people who wrote about the Hawthorne experiments was Elton Mayo
(1880–1949), who is often quoted as having been a leader of the researchers.

The illumination experiments

 These studies were expected to determine the relationship between the
level of illumination and worker’s productivity.
 It was expected that worker’s productivity would increase with increasing
levels of illumination.
 The studies failed to prove any relationship between worker’s productivity
and level of illumination
The relay assembly test room
 These studies were carried out to determine the relationship between
worker’s productivity and improved benefits and working conditions.
 The studies found out that there was no cause – and – effect relationship
between working conditions and output.
 Rather, there were other factors that affected worker’s output such as
his/her attitudes and supervisor behavior
This has become famous as the ‘Hawthorne Effect’.
The interviewing programme
 A group of employees were interviewed to learn more about their opinions
with respect to their work, working conditions and supervision. The
workers suggested that:
 Psychological factors help determine whether a worker is satisfied or
dissatisfied in any particular work situation
 The person’s need for self-actualization determines his/her satisfaction in
the work.
 A person’s work group and his relationship to it, also determines his/her
productivity.
The bank wiring observation room
 This study was expected to study the effect of group influence on workers
productivity.
 The researchers found out that an informal grouping and relationship was a
critical factor in the workers’ productivity.
 The informal group determined the group’s productivity, and functioned as
a protective mechanism (served both for internal and external purposes).

THE COGNITIVE SCHOOL

Henry Mintzberg
Henry Mintzberg is known for his pioneering work in the field of strategic
management in organizations. Born in Montreal, he earned his BA from Sir
George Williams University in 1962, BEng from McGill University, and his
Master’s and PhD degrees from the Massachusetts Institute of Technology.
The Cognitive School: Strategy Systems as Mental Processes
 It analyzes how people perceive patterns and process information.
 Concentrates on what is happening in the mind of the strategist, and how
it processes the information.
 Strategies emerge as concepts, maps, schemas and frames of reality.
 Stresses the creative side of the strategy process. Strong at the level of an
individual strategist. very useful to explain why our minds are imperfect
Understanding The Mind
People have different thinking preferences which they bring into their
business interactions and decisions.
The Whole Brain Model is used to determine those thinking preferences.
Each individual falls under one of four categories. Figure illustrates the
preferred thinking styles for each quadrant of Herrmann’s Brain Dominance
Model.
The four thinking styles in the whole brain model are:
 Logician- analytical mathematical technical and problem solving
 Organizer- control conservative planned organized and administrative in
nature
 Communicator- interpersonal emotional musical spiritual and the Talker
modes
 Visionary- imaginative synthesizing artistic holistic and conceptual modes
 FRAME WORK OF ORGANIZATIONAL BEHAVIOUR

Behavioral Framework:
Behavior can be best explained in terms of stimulus—Response. That is, a
particular stimulus will lead to a particular response. However, responses
can be conditioned or trained by presenting conditioned
stimulus/consequences.

Classical Conditioning:
Ivan Pavlov and John Watson developed this theory. According to this
theory, learning/conditioning takes place when Stimulus-Response
connection is established. Classical conditioning may be defined as a
process in which a neutral stimulus, when repeatedly paired with an
unconditioned stimulus, becomes a conditioned stimulus that elicits a
conditioned response. This may be explained as under:
Unconditioned Stimulus—Unconditioned Response
Conditioned stimulus—Conditioned Response.

Ivan Pavlov developed the theory of classical conditioning on the basis of

his famous experiment with dog. Whenever he presented meat powder
(Unconditioned Stimulus) to the dog, it salivated (Unconditioned
Response). The dog did not salivate when a bell rung (Neutral
Stimulus/Conditioned Stimulus). Later, Pavlov rang the bell (Conditioned
Stimulus) whenever he presented meat powder (Unconditioned Stimulus)
to the dog. He repeated the exercise several times. Afterwards, Pavlov rang
the bell (Conditioned Stimulus) without presenting the meat powder
(Unconditioned Stimulus) and found that the dog actually salivated
(Conditioned Response).

Operant Conditioning:
B F Skinner developed Operant Conditioning theory in order to overcome
the weaknesses of Classical Conditioning. In Operant Conditioning,
responses to a particular stimulus occur on the basis on consequences of
that response. Thus there is strong association between consequence and
response to a particular stimulus.

Stimulus—Response—Consequences—Future Response on the basis of consequence

Behavioral framework debunked the Freudian proposition that behavior
came from unconscious.

Cognitive framework
Cognition means a mental process involved in knowing, learning and
understanding things. Edward Tolman propounded this theory in 1940s.
According to cognitive Framework, cognition precedes response/behaviour
and constitute inputs into person’s thinking, perception, problem solving
and information [Link] theory may be explained as under:
Stimulus-Cognition-Response
According to Tolman, behaviour of a person is determined by Expectancy,
Demand and Intention based on his/her cognition. He developed this
theory on the basis of his experiment with white rat. He found that a rat
could learn to run through an intricate maze with a purpose and direction
towards a goal (food). He observed that at each choice point in the maze,
expectations were established. In other words, the rat learned to expect
that certain cognitive cues associated with the choice point might
eventually lead to food. If the rat actually received the food, the association
between the cue and expectancy was established and learning occurred.
In Organizational Behaviour, Cognitive Framework has been applied mainly
in motivation. Expectations, attributions, locus of control and goal-setting
are all cognitive concepts that represent purposefulness of the subject.

Social Cognitive Framework:

This framework was developed by Albert Bandura who believes that human
behavior can best be explained in terms of a continuous reciprocal
interaction among cognitive, behavioral and environmental determinants.
Most of our responses are guided by observation and imitation.
According to this theory, human behavior is determined by five basic
capabilities:
Symbolizing: An individual associates a symbol to his future responses.
Forethought: An individual anticipates the consequences and accordingly
makes a choice of responses.
Observational: An individual observes others before choosing his/her own
responses.
Self-regulatory: an individual controls his/her action by setting internal
standards (aspired levels of performance) and by evaluating discrepancy
between the standard and the performance
Self-reflective: An individual reflects back on his/her actions and
perceptually determine the causes of success or failure and possible
measure to improve the quality of responses.